New Zealand offers no-fault compensation model.(Practice Trends)

ALEXANDRIA, VA. -- In New Zealand, all physicians pay $700 a year for indemnity insurance, and it's nearly impossible to sue a physician.

That's because New Zealand has had a no-fault injury compensation system in place for the last 30 years.

The Accident Compensation Corporation (ACC), a state-funded insurer established in 1974, addresses unmet patient expenses from injuries. And since 1994, New Zealand's Health and Disability Commissioner has handled complaint resolution and provider accountability.

"We've made a really good start," Marie Bismark, M.B., a legal advisor to the New Zealand health and disability commissioner, said at a meeting on patient safety and medical liability sponsored by the Joint Commission on Accreditation of Healthcare Organizations.

Compensation is available to patients for medical errors that result from a failure to observe a reasonable standard of care. The ACC also provides compensation for medical mishaps that are defined as rare and severe adverse outcomes of appropriate treatment.

Dr. Bismark gave an example of how the system works: A 22-year-old woman with a history of pelvic pain underwent laparoscopy to confirm the diagnosis of endometriosis. During the surgery, her bowel was perforated, which lead to peritonitis. The woman required further surgery to remove the perforated section of her bowel and form a temporary colostomy. She spent 3 weeks in critical care recovering.

New Zealand's Accident Compensation Corporation accepted the woman's claim as a medical mishap and she was awarded $28,000 to cover treatment costs, pharmaceuticals, transportation, home help, and lost earnings.